ChatGPT’s Popularity Boosts OpenAI’s Value To $29 Billion

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According to a report from The Wall Street Journal, research lab OpenAI, the designer of ChatGPT, is thinking about a tender offer that would value the company at around $29 billion.

The deal would include purchasing a defined number of shares from existing investors at a repaired cost and would approximately double OpenAI’s appraisal from a previous tender offer completed in 2021, when the business was valued at around $14 billion.

The offer is apparently being worked out with venture capital firms Flourish Capital and Creators Fund. If it goes through it would make OpenAI one of the most valuable start-ups in the United States.

The considerable increase in the company’s worth is likely due in part to the extensive appeal of ChatGPT, which gained over a million users within the very first 5 days of being made available to the general public.

Given that OpenAI’s most popular product is provided totally free, it may appear surprising that the business is valued so extremely.

OpenAI generates millions in revenue by selling its AI software application to developers. OpenAI is currently providing cloud services to Microsoft for tools that permit users to produce text, code, and images using simple guidelines.

Additionally, as a research organization, OpenAI is funded through a mix of donations, sponsorships, and grants.

A few of the sources of funding for OpenAI include companies like Microsoft and specific philanthropists such as Elon Musk and Sam Altman.

In 2019, Microsoft invested $1 billion in OpenAI, and the business has been talking about the possibility of making a much bigger financial investment in the AI business, potentially worth 10s of billions of dollars.

With further investment, OpenAI can deal with incorporating its AI technology with other Microsoft items.

This week, it was reported that Microsoft prepares to incorporate AI innovation from OpenAI’s ChatGPT chatbot into its Bing online search engine.

See: Microsoft Bing With ChatGPT Reportedly Launching In March

ChatGPT integration will allow Bing to supply total sentences in reaction to browse inquiries instead of lists of links.

The updated search function is expected to be available by the end of March and can potentially provide Microsoft a benefit over Google.

The tender offer has not yet been finalized, and the terms could alter. OpenAI declined to comment on The Wall Street Journal’s report.